Home Value = $100,000 Two Financing Alternatives

jagguarpaw January 10, 2017 0 Comments

Question: 21. Home Value = $100,000 Two Financing Alternatives…

  1. Home Value = $100,000

Two Financing Alternatives

#1: 90% Loan to Value, 10.5% Interest Rate, 30 Years

#2: 80% Loan to Value, 10% Interest Rate, 25 Years

If you can invest $10,000 on investment that gives you IRR of 15% yearly, which of the two Financing Alternatives is better for you? Show your decision steps.